Report: Hulu working on Internet-based pay TV package

If you want to be trend in the pay television market, you need to figure out a way to deliver cable channels over the Internet.

That seems to be the lesson as a growing number of companies have rolled out Internet-delivered pay TV bundles, announced they’ll be launching one soon or have been reported to have one in the works.

The latest company to catch the Internet-based pay TV bug is Hulu. The company, which already streams popular television shows online, is working on a new service that would offer consumers a package of broadcast and cable channels delivered over the Internet, according to the Wall Street Journal.

The package, which would likely cost around $40 a month, is expected to include access to networks operated by Disney and 21st Century Fox, both part-owners of Hulu. Among the channels that likely would be a part of the bundle are ESPN, ABC, Fox News and FX, the Journal reported.

Hulu tentatively plans to launch the service in the first quarter of next year.

The service would be the latest example of a pay television package that’s distributed over the public Internet, rather than through a private network owned by a cable, satellite or telephone company. Last year, Dish and Sony launched Sling TV and PlayStation Vue, respectively. Both services offer bundles of cable channels that consumers access through an app on Internet-connected devices. In March, AT&T’s DirecTV announced that it would begin offering similar Internet-distributed pay TV packages by the end of this year.

By distributing a pay TV service over the Internet rather than through a dedicated cable or phone network, a company can instantly offer its service nationwide, instead of being confined to a particular area of the country where it owns the wires to consumers’ homes. And because such services can typically be accessed via a variety of Internet-connected devices, companies can save money by not having to distribute dedicated set-top boxes, while offering their consumers flexibility on how to watch their programming.

Companies have also used — or attempted to use — the move to Internet distribution as a catalyst to rethink and slim down the typical pay TV bundle in order to offer cheaper packages for consumers. Many in the industry believe that lower prices are important to lure in the so-called “cord cutters” and “cord nevers” — those who have either cancelled their traditional pay TV service or who have never signed up for one.

Photo: The Hulu logo on a window at studio space in New York. (AP/Dan Goodman)